so we're we are, 2012 election. it's become a referendum on the means of america. it's the exceptional promises. and the engines of the american dream. that's a debate conservatives welcome, a debate this country needs to have and is the model, i think, barack obama loses. thanks. >> bill had kindly said that if i wanted to reply, i could. and i have been inspired especially by jim and matt to want to do that. i want to begin, though, by saying if anyone from osawatomie, kansas, is watching, i apologize. we even seem to disagree on how to pronounce the name of your town. i want to salute jim ceaser for doing such a good job on behalf of the party of evasion because the party of evasion claims that the biggest problem fashioning

our nation is a budget deficit, whereas the party of reality understands that the biggest problem facing our nation is the growing concentration of wealth that has afflicted us for almost 40 years. the party of evasion tries to argue that -- tries to protect the very wealthy by saying that elderly people who need health care in an increasingly expensive medical system are the source of our problems. the party of reality argues that the budget deficit has to be seen in the context of this economic inequality and the difficulties middle-class americans are facing in a new world economy that has added literally 2 billion people to the global labor force. i could go on like this and i'm perfectly happy to do so. i think jim underscored something that's actually very helpful for us. which is why did barack obama give this speech in osawatomie, kansas. and he gave this speech, i think, because he wanted to redefine what was the central issue in american life.

and i think in the first six months of 2011, president obama really went along with the narrative that jim offered for the country and really seemed to accept that the fiscal problems facing the country were the most important, and it was a battle in which he did not do particularly well in public opinion. and i think he didn't do particularly well because i don't think that was ever at the center of barack obama's presidency. solving our fiscal problems was a part of a larger objective. and so i think by giving that speech, president obama really challenged the very definition of what is at the center of american politics. and therefore i also disagree with matt that this constitutes obama abandoning the center. on the contrary, i think obama has learned from a president very much admired at this institution, ronald reagan, which is you don't win by chasing the center.

you win by moving the center and by persuading the center. and i think that what obama was doing in invoking t.r. was trying to move the center and change the nature of our debate. a little of what i want to say comes from a book that i have coming out in may in which my friend bill schambra actually plays a role. the book is called "our divided political heart." the subtitle is "the battle for the american idea in an age of discontent." and i think the one thing all of us may agree on is that we are having a large argument over who we are as americans. what does it mean to be american? what does our tradition mean? and in my book i take issue with the tea party, but i salute them for encouraging us all to go back to our history. and that's the second reason why i think the osawatomie speech

was important. jacob javits, the senator, progressive republican senator from new york, wrote a very interesting book back in the 1960s called "order of battle." and in that book, he has a section called the choice of ancestors, and he defends his brand of republicanism. and the ancestors he chooses are alexander hamilton, henry clay, abraham lincoln, and theodore roosevelt. and what i'd like to assert is contrary to what some of my conservative friends would argue, the notion of a strong and influential federal government that was essential to american economic growth goes right back to the founding of the constitution was not created to create a weaker central government. it was created to create a stronger central government because our founders understood

that the situation of the articles of confederation to which on some days i think governor perry wants us to return, was inadequate to the needs of a great nation. and i think that by going back to t.r. rather than fdr, president obama was underscoring that there is a tradition of national action in our history. and it is the tradition that on the whole has served us better. what did t.r. talk about in the osawatomie speech? is it irrelevant to today? well, he had a whole lot to say about the influence of corporate money on political campaigns. and if you go back and read what he said about that and look at the current situation we are in, it was indeed highly relevant. he also talked a lot about, and as sid makes clear in his book, made it a central element of his campaign, he talked about overreaching activist conservative courts.

and i believe as, for example, the citizens united decision might suggest, that that, too, is a central issue in american life today. he talked about concentrated economic power. there are sections of this speech that would go down very well if done through the human microphone of the occupy wall street movement. and he spoke of the fears of the middle class that they were being squeezed out of both economic and political life. yes, i believe osawatomie is relevant to our moment. now, in many ways it's true that president obama's speech is actually less radical than fdr's -- than theodore roosevelt's speech was. there was this wonderful moment in the osawatomie speech where t.r. talks about a -- his being accused of being socialist. and that a socialist paper in kansas took this as a great insult to socialism. and i think that president obama

probably smiled when he read that part of the osawatomie speech. we can probably discuss this, as many of you know, there is a great argument between contemporary progressives and conservatives over what the progressive era was really about. and matt channeled some of this and reflected some of this. my conservative friends like to talk about progressives as being primarily about centralization of government ruled by experts and some kind of elitism. what progressives who defend that tradition would argue, they'd acknowledge, by the way, some real difficulties. some progressives were really caught up in the racism of that time that affected the whole political spectrum at that moment. there were things that the progressives did to voter registration to limit the franchise that contemporary progressives would and should have problems with. but if you look at the thrust of what the progressives were

doing, they were highly democratic at heart proposing initiative referendum and recall. and it's worth noting they did that because they believed that state legislatures all over the country were under the influence and control of corporate interests. and so they proposed referenda in order to make the system democratic again by getting around these corporate-controlled legislatures. they were concerned about bringing democracy to economic life. and you can see this in both woodrow wilson's and theodore roosevelt's clashing conceptions of what being progressive meant. they also saw government as a countervailing power to concentrated economic power. and it does seem to me that at the heart of our republic whenever it was successful is this sense of balance between public and private using different parts of our system to hold others in check. we're not only madisonian in our constitution, i think we're madisonian in our social life. and again, my biggest difference

with my conservative friends is they tend not to see concentrated economic power as justifying government intervention on behalf of a more democratic system. there are two other points i want to make before i close. the first is sid talked about the problem with the term "public option." and i do think that we are -- those of us who respect the progressive tradition actually also respect the word "public." and i'd actually like to defend the word "public." a few phrases. public schools, public libraries, public health, public responsibility, public service. i think if you are a progressive, you argue that not all of life is private. that there are public responsibilities and that there are joys in public responsibilities. one of my favorite lines from any book of political philosophy is in mike sandell's first book where he concludes, "when politics goes well, we can know

a good and common that we cannot know alone." and i think that is the heart of the progressive promise. i think 2012 could actually be as exciting and interesting as 1912 even if, i will concede freely, we will not have characters quite like teddy roosevelt, woodrow wilson, william howard taft and eugene. but i think it is as important as 1912 because every candidate -- i just came back from iowa yesterday. and what really strikes me is that president obama and his opponents agree on the definition of the campaign. every campaign people always say, this is the most important election in our history. actually, this time the candidates are really talking about a fundamental argument over the direction that our country is going to take. it is my view -- and this is the last reason why i think osawatomie was the right choice for a venue -- is that we have

effectively been governed under a long consensus since the progressive era. that long consensus saw a balance between public and private, saw a major role for the federal government in both regulating the capitalist economy to make it work, and to ensure greater fairness. even ronald reagan did not overturn this consensus. you know that great line about wagner's music, that it's better than it sounds? ronald reagan governed more progressively than he sounded. he didn't get rid of social security. he didn't get rid of medicare. there are a lot of things he had talked about that he didn't do. and i think, in fact, some of reagan's greatest achievements come from having governed from the center. george w. bush, by the way, two of his greatest domestic achievements were based on using the power of the federal government. one is the prescription drug benefit under medicare. the other is the no child left behind act which sought to use federal power to ensure more accountability in the schools.

this time i think we really are in a fight over the long consensus. the progressives came along building on what the populists had done in reaction to the politics of the gilded age. and i think our conservative friends -- and this is one of the points where bill comes into my book -- have pushed aside temporarily their more communitarian traditions and are operating on the basis of a kind of radical individualism that is very much out of the gilded age. i like conservatism. many of my best friends are conservative. i want conservatives to rediscover their respect for the role of government and their respect for the importance of community. so i'm hoping this election will provide not only a ratification of our progressive direction, but some useful lessons for our conservative friends. and i look forward to that. teddy roosevelt -- i've been waiting for a progressive to

accept a nomination the way teddy roosevelt accepted the progressive nomination in 1912. his last words were, "we stand at armageddon, and we battle for the lord." and i think in 2012, both sides actually are going to believe that we stand at armageddon, and we battle for the lord. thank you very much. >> before we go to the audience for q&a, any response? any general comment amongst the panelists? >> go ahead and open it up. >> no, i just want to point out, on the table, i think e.j. really said it very nicely. is i think the debate here is we have to stop kind of setting up straw men. as if it's these opposites.

it's either nationalism and community or it's kind of complete and utter radical individualism over here. there is a -- the debate we're having is what is the consensus. and the argument, the claim of my progressive friends is that the consensus from the founding forward has essentially been their consensus. and it's an unbroken, beautiful evolution of progressive programs. i don't think that's historically accurate for one thing. and i don't think it's really fair to the kind of debate we're having right now. i mean, we are debating about that consensus. it is a balance between public and private, all the things you mentioned, i agree. you know, i think that's exactly the claim of conservatives. and you're not seeing a rebirth despite president obama's

attempts rhetorically of kind of laissez faire radical individualism. what you're seeing is conservatives trying to grapple with the problems we face. how do you reform these big programs to actually serve their purpose and not go under in a way that is somehow consistent with a broader consensus for some sorts of limits on government, some sort of argument that allows for popular consensus to shape how our politics proceed. and in that case i would argue that what president obama is arguing is on the outside of that consensus. >> going to one point that you make, matt, and you and i have had this conversation a number of times. in point of fact, the characterization, obama's characterization of conservatives as being sort of radical laissez faire, you know, i got mine, you get yours. that's very much -- that is, in fact, very much in the spirit of t.r. in 1912. >> right. >> he was the first to utter that -- that condemnation of the conservative republicans in that

year. and it was wildly unfair at the time. it was massively unfair at the time. right after the osawatomie speech, one of his friends and supporter, a senator from new york, wrote president taft and said, for the life of me, i don't understand what's new about the new nationalism. i mean, it seems to me as if it's a call for the exercise of legitimate constitutional power. and that's all it is. so, you know, the conservative republicans at the time in 1912 and certainly in the person of taft himself, were not radical laissez faire -- you know, they didn't believe in a completely unfettered marketplace, rugged individualism, social darwinism. they were very much all in the school of a powerful national government, the remediating the problems that they could reach. but anyway, that being the case -- yes, please.

oh, yes. and if you could speak -- these microphones, for whatever reason, are very hard to -- >> i'll do my best to be heard. >> be very close to the microphone. >> we can hear you. >> that's very kind of you. >> and you have to identify yourself. >> irwin snells, the hudson institute. and thank you for that remark, e.j. i was going along almost agreeing with you until you really got into full flow. [ laughter ] >> i had the feeling. >> but let me put a problem that i have with professor ceaser and to mr. spalding. i want to be on your side in this argument. but i am having great difficulty for two reasons. perhaps you can help me out. one is because of laws in corporate governments that we know about and because of

macroeconomic problems that require -- let's call it bailing out rather large financial institutions. is it true -- well, i think it's true, demonstrably true, that we've disconnected performance and reward in society. i don't care about inequality. i'm for as much inequality as we can get if performance is connected to reward. the question is, how do we defend the inequality that so troubles -- let's call it the people on the other side -- if we can't conceive of reforms that reconnect performance and reward? and the reason i raise it is, i hear people -- my conservative friends that e.j. likes to put it -- i assume he has one. [ laughter ] >> i'm his friend. >> okay.

he has one. >> he has one. >> okay. the problem is that every time any reform i suggest that might reconnect these things, they say oh, no, that's really not a good idea. we're not for sarbanes-oxley, which would require independent directives. we're not for dodd-frank which would require severing parts of the banking system. so i can't ever come up with any reconnection that seems to satisfy what are my conservative friends. i'd love to hear if there are any. >> well, since you just made -- let me take a try. yeah. on this question of performance and reward and the bailouts, i don't know anyone except for maybe jon corzine and a few others on wall street who are happy with what had to be done in 2008.

i know president bush wasn't. this was recognized by all as a massive deviation from what capitalism should all be about. massive deviation from what capitalism should all be about. done under necessity. and i don't think anyone, conservative or liberal, you know, would cry that much to say that those people, morally, should never have been bail ed out and were only bailed out because it was said to be necessary. it's something you do when you hold your nose. on the other hand, here's the point. we've held our our nose and we've done it. we know that in that sector, i think the profits that people make have very little claim morally to us. if you could just tax them, the people in that field, that part of the 1%, everyone would be happy. but, gee, that's not the whole 1%. i know people when they speak about this, the progressives always mention that, the places are you can see no connection between performance and reward. but most of the 1%, there is a

connection between performance and reward. so what do we do? like abraham, how many, lord, do we do away with before we save the city? >> i say take a broader look. and i speak with my students. they always -- when they make this argument about the 1%, they always mention berth finance, which no one understands, anyhow. they mention croney capitalism. and then they mention -- now we can go back and mention less often the pharmaceuticals, the oil companies. what's financial and what's nasty. but then you say to them oh, see jobs. lebron james and all of the sudden, they say everything is perfectly just. that person should be getting more. or bill gates. what does every young person want to do? work in the bill gates foundation. all may made by private money. so i say we put this in perspective. we see where there's a problem in the issue of performance and reward. we see what we can do. but, certainly, we don't contend the whole essence of the capitalist system and reward on the basis of that problem. the larger issue is the productive many.

and it's for that reason that i think there is a kind of practical and moral defense of capitalism. >> can i say something? first of all, i always loved irwin because he's willing to face these problems of capitalism even as a staunch defender of the system. and i think what you're seeing on the progressive side, again, not unlike some of the things that were said back in the teddy roosevelt's day, is that we have shifted too many of the rewards within the capitalist system toward those engaged in finance. and that part of the -- you know, you raised the question of, you know, how do you create accountability in this system? and i think the way in which we've gone about deregulation, perhaps even going back to the repeal of glass spiegel, is that we have a society in which the surest way to get very rich very quickly is to go into finance,

as opposed to starting or running a business yourself. as opposed to engaging in invention. i think people do make the moral distinction that jim talked about. that's between those who make all of their income from finance and those who make their income from invention, creation and the like. and i think that we take a specific step such as the ways in which we tax capital gains as opposed to income, to really say that as a society, we seem to prefer finance. i mean, i know the argument for it is this creates a more productive system. i have not seen our economy do exceptionally well since we cut the capital gains tax. i don't intend that's causation, but it's certainly not proof that this was the guarantee of a more productive economy. i think that is kind of upside lying sort of question that i think is why the occupy wall street people seemed to get some initial purchase on the country.

there is a sense that not all of this wealth was acquired by doing things that the society itself sees as genuinely productive. now, i can see sometimes this side is wrong about that. sometimes i'm wrong about that. but i think there is a sense of injustice and impracticality about the way we've organized our economy in the last 20, 25 years. >> take some more questions. >> i assume you disagree with me. >> excuse me, i think -- i think -- i think, a.j., you have to avoid a kind of marxist distinction between people who make things with their hands and finance. nobody is angry at buffet, except me for his silly statements. but the -- i don't think you're on the right track on that. the market or ought ought to decide which industries rise and which industries fall and if

finance rises, it's a darn good thing because manufacturing is not in very good shape. so i hope you don't go there. i would rather you think about what can be done to satisfy your feeling or professor sazaor's feeling that there are kind of morally unjust returns that have been earned. and what worries me, i held my nose, too. and you had to do it. you're going to have to do it again. and that's the problem. we have this built into the system disconnect that is -- that i find so troubling because, believe me, if all of the insurance that our banks have sold against failures of sovereign debt in europe start coming due, you're going to find yourself holding your nose again. and the question is what do we do in those circumstances? >> just one very quick -- first of all, i appreciate your concern for my soul and trying to save me from marxist sins.

but i do think that there is -- we have a different kind of banking and finance system than we had some years ago. and it really does trouble me that there may be more reward for a kind of engineer who can figure out how to beat the market by two tenths of a second than for other kinds of engineers who may create products that are useful. and they get rich that way. i just think that we have created a very strange and exceedingly abstract finance system. and that we need finance. we need capital to make capitalism work. but i think the rewards within that system we've created don't make sense to a lot of people and they don't make sense to me. >> yes, sir, in the back? >> i'm mark tabscot with the washington examiner.

i've had occasion in my younger years to spend about a year and a half reading and studying everything that john brown wrote. and i'm curious, do any of you all have any understanding of why roosevelt picked as the venue for this speech? and depending on what your answer is, i might have a follow up. >> oh, that's a lot of -- that's a lot of press i think there are two reasons. have to say, i've looked for some are cavalier smoking gun. there isn't any precise smoking gun. but from what i can gather, two reasons. one, roosevelt wanted to make an important statement. he was launching the plots form as the press figured out, preparing not only for the 1912 campaign, but preparing for a defense, a much more aggressive one than he launched as

president for a major transf transformation of american democracy. and this, because the civil war was so still so important to the american people, this was a good place to do it. the other place relates to this thing of par tan san ship versus consensus that roosevelt was sometimes accused of being a socialist and sometimes he was accused of insulting socialists by presuming to represent reform. and i think he wanted to go to -- he wanted to go to the john brown memorial to point out there's certain value in insurgeon psi and we have to honor john brown to a certain extonality. but when it goes to mob rule, then we denigrate rather than honor. and so he wanted to find a position between socialists and capitalists that was reformist. and he saw john brown as a useful way of distinguishing himself from the socialists.

and a good part of his longer speech that appears in the outlook magazine, spends a lot of time distinguishing a reform from mob rule. and he also connected a lot of labor insurrection to historically to john brown. is that any help? >> yeah, he was -- according to -- i think there was a fella named robert laford who wrote in the kansas historical quarterly talking about the origins of the seek su speech suggesting that as sid sugges suggests, that t.r. was hoping to capture the insurgency and sort of moderate it -- >> channel it. >> yeah, channel it away from -- he wasn't necessarily thinking of running as a full-on challen challenger at the time, although he kept dropping these horrible comments about the taft administration. he was sort of hoping